China won't let regional tensions harm economic interests: IMF chief

Madam Christine Lagarde, the managing director of the International Monetary Fund (IMF) is hopeful that China would not allow tensions with its regional neighbours harm its economic interests.

"China has such a large economy, so many opportunities and so much to do, and I hope it focuses on that," she said in an interview with The Straits Times on Wednesday at her office in the US capital.

"When an economic power reaches the size of China and is the second largest economy in the world, it comes with responsibilities, and I think the Chinese authorities are very much aware of the responsibilities they have for their population, for their country, but also the stability of the world," she added.

She added that she was not concerned about a recent slowdown in the Chinese economy, even though the news had spooked markets and caused a drop in the price of commodities.

"We believe that sustainable, quality, slightly slower growth is fine," she said.

In her interview with The Straits Times, she also touched on the US economic recovery but lamented the fact that the US has still to ratify IMF quota reforms that provide sustainable funding to the organisation.

During the 20-minute interview, she also paid tribute to Singapore Deputy Prime Minister Tharman Shanmugaratnam for his work as the chair of the IMF's International Monetary and Financial Committee (IMFC).

"For the last 2 1/2 years, he has been a terrific chairman for the IMFC. Because he is obviously very well read, very thoughtful and a great technician, which some people around here love, and that's good.

"But he's also a great listener. He's very attentive to people, to their respective concerns, to their respective agendas.

"He is capable of brokering arrangements, compromises, because he understands people, and he can listen to their position without involving a big ego as part of it."

Her comments come ahead of the Spring meetings of the IMF next week, when the ministers of finance and heads of the central banks of the fund's 188 member countries converge on Washington for their annual meetings. The leaders are expected to focus largely on economic cooperation and integration.

Separately, at a public speech on Wednesday, Madam Lagarde stressed the importance of cooperation saying that spillover effects of any one economic policy meant countries could no longer simply focus on doing what they thought was right at home, without worrying about implications abroad.

jeremyau@sph.com.sg

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